UPDATE 1-Shutterfly shares fall as photo pricing pressure looms
(Adds company comments, details of acquisition)
Jan 4 (Reuters) - Shares of online photo-sharing company Shutterfly Inc (SFLY.O: Quotazione) fell for a second straight day on Friday following a recent price cut on photo prints by rival Snapfish, a unit of Hewlett-Packard Co (HPQ.N: Quotazione).
Redwood City, California-based Shutterfly shares have lost more than one-fourth of their value from Wednesday's closing price of $25.70. On Friday, the stock hit an intra-day low of $18.62 but recovered losses, closing down about 4 percent at $20.75 on the Nasdaq.
The shares have lost about half of their value in the last two months.
In late December, rival Snapfish cut its everyday price on 4x6 prints to 9 cents from 12 cents, raising concerns among investors that it may be the beginning of a new price war. Shutterfly charges 19 cents for the same size prints, while it costs 15 cents on Kodak Gallery.
Chief Executive Jeffrey Housenbold, in a conference call, said Shutterfly will not be impacted by the Snapfish price cut as the company has always been able to command premium pricing and is seeing faster growth in its personalized products and services segment, which include photo books, greeting cards and frames.
The company also said it is acquiring Nexo Systems Inc, a privately held online sharing services company that has developed a platform for creating customized Web sites.
On Friday at least one brokerage lowered its rating on Shutterfly.
"We believe it would be a challenge for the company to maintain a $0.10 pricing differential (regardless of customer demographics) without risking a potential slow-down in new customer growth," American Technology Research analyst Brad Manuilow said in a note to clients. Continua...